What is Real Estate Crowdfunding?
Similar to p2p lending, real estate crowdfunding refers to the pooling of money from various individuals to invest in real estate projects. Real estate crowdfunding is not new – these property investments are often called syndication deals, accessible only to large institutional investors or accredited investors. But now, with the power of Internet and the growth of crowdfunding movement, many more investors will soon have access to various real estate projects.
What are the advantages of Real Estate Crowdfunding?
- The investment is backed by an actual property
- Able to invest in different types of property projects (residential, commercial, industrial, etc.) and at different stages (development stage, pre-launch)
- Able to invest across the debt and equity tranches
- Able to have access into previously inaccessible opportunities
What are the challenges of Real Estate Crowdfunding?
- Real estate is a very broad field and there is a lot to learn
- Most real estate projects are overseas; difficulty in understanding local conditions, fx risk
- Lack of visibility into developer’s track record.
- Investment have a longer term horizon (usually several years)
- Larger minimum investment size
What are the platforms in Singapore?
Where am I in terms of Real Estate Crowdfunding?
In Singapore, we are right at the very beginning of real estate crowdfunding. And things are still rough at the edges. The platforms are new with almost no track record to speak off. Many are open only to accredited investors, while others operate in an online/offline mode, which makes obtaining useful information tricky. Minimum investment sums are sometimes quite large, e.g. USD100k. I’m a firm believer of crowdfunding, but I also believe in prudent risk taking. I’m still doing my due diligence – attending meetings, speaking to the platforms, reading up, etc etc… but hope to invest and blog about it soon.
What about you? Have you invested in any real estate crowdfunding projects before? What’s your experience like? Feel free to write in the comments below drop me an email at firstname.lastname@example.org